You know that clean-functioning, low-maintenance, amazingly energy-efficient geothermal heating and cooling system you’ve been eying but couldn’t afford? Well, despair not! Because, as of February 2018, the federal government’s 30% geothermal tax credit is back again! And what was once unaffordable may now be well within reach, whether for a new home you’re building in Southwest Michigan or for the enhancement of your present home. You’ll want to act right away, though, because the federal tax credit amount is scheduled to shrink each year through 2021.

Here are the essential facts:

A full 30% of the total cost of your geothermal system is covered by this credit through 2019. Beginning in 2020, then, only 26% of the ultimate cost is covered. And in 2021, only 22%.

The federal geothermal tax credit can be applied retroactively to installations that are “placed in service” as of January 1, 2017, or thereafter. “Placed in service” means that the installation of your geothermal heating and cooling system is complete and the equipment is ready for use. That said, your system is part of a recently built or renovated home, it’s regarded as “placed in service” the moment you take up residence.

What’s eligible for the tax credit is geothermal equipment that, a) uses solar energy stored in the earth for heating and cooling and, b) fulfills all ENERGY STAR requirements at the time of installation.

Covered expenditures take into consideration labor for onsite preparation, assembly, or original system installation and for the piping or wiring that your geothermal system to your home.